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Strategic Alternatives in Global Marketing

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Strategic Alternatives in Global Marketing Global Marketing Tenth Edition Chapter 10 Brand and Product Decisions in Global Marketing Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Learning Objectives 10.1 Review the basic product concepts that underlie a successful global marketing product strategy. 10.2 Compare and contrast local products and brands, international products and brands, and global products and brands. 10.3 Explain how Maslow’s needs hierarchy helps global marketers understand the benefits sought by buyers in different parts of the world. 10.4 Outline the importance of “country of origin” as a brand element. 10.5 List the five strategic alternatives that marketers can utilize during the global product planning process. 10.6 Explain the new-product continuum and compare and contrast the different types of innovation. Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Basic Product Concepts • A product is a good, service, or idea – Tangible Attributes – Intangible Attributes • Product types – Consumer goods – Industrial goods Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Product Warranties • An Express Warranty is a written guarantee that assures the buyer is getting what he or she paid for or provides a remedy in case of a product failure • Warranties can be used as a competitive tool to position a company in a positive way Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Packaging • Consumer Packaged Goods are a variety of products whose packaging protects or contains the product from production to the end user • Eco-packaging addresses environmental issues like recycling, biodegradability, & sustainable forestry • Must engage the senses, make an emotional connection, & enhance the brand experience – Examples: Absolut Vodka, Altoids breath mints, Godiva Chocolates, Corona Extra, Coca-Cola, Grey Goose, Aquafresh Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Labeling • Attracts attention, supports product positioning, persuades consumers to buy • Provides consumers with various types of information • Regulations differ by country regarding various products – Health warnings on tobacco products – American Automobile Labeling Act clarifies the country of origin, and final assembly point – European Union requires labels on all food products that include ingredients from genetically modified crops Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Aesthetics • Global marketers must understand the importance of visual aesthetics • Aesthetic styles (degree of complexity found on a label) differ around the world • Some colors may be standardized around the world (John Deere’s green, Marlboro’s red, Caterpillar’s yellow) • Other colors must be changed in response to local culture – In Asian countries white is associated with death and bad luck Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Basic Brand Concepts • A brand is a bundle of images and experiences in the customer’s mind • A promise made by a particular company about a particular product • A quality certification • Differentiation between competing products • The sum of impressions about a brand is the Brand Image – Steve Jobs’ constant media presence and Apple Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Brand Equity • Brand equity is the total value that accrues to a product as a result of investments in the marketing of the brand. • An asset that represents the value created by the relationship between the brand and customer over time. • Seen as a protective moat around economic castles according to Warren Buffet. • Logos, packaging, other communication devices provide a visual representation of the brand. • A Word Mark logo is like the distinctive script of Coca-Cola • A nonword mark logo, or brand symbol, is like McDonald’s golden arches, Nike’s swoosh, or Mercedes’ three-pronged star Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Brand Equity Benefits • Greater loyalty • Less vulnerability to marketing actions • Less vulnerability to marketing crises • Larger margins • More inelastic consumer response to price increases • More elastic consumer response to price decreases • Increased marketing communication effectiveness Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Local Products and Brands • Brands that have achieved success in a single national market – Coca-Cola has products only for the Japanese market • Represent the lifeblood of domestic companies • Entrenched local products/brands can be a significant competitive hurdle to global companies Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved International Products and Brands • Products and brands offered in several markets in a particular region – “Euro brands” – Daimler’s Smart Car – Honda 5-door hatchback auto is known as Fit in Japan, and Jazz in Europe; Fit was rolled out to Australia, South America, South Africa, China, U.S. Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Global Products and Brands (1 of 2) • Global products meet the wants and needs of a global market and are offered in all world regions at each stage of development • Global brands have the same name and similar image and positioning throughout the world – BMW : Ultimate Driving Machine In any language Gillette’s – GE: Imagination at Work trademarked brand promise is easy to understand. – Visa: Life takes Visa – Harley-Davidson: An American Legend Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Global Products and Brands (2 of 2) “A multinational has operations in different countries. A global company views the world as a single country. We know Argentina and France are different, but we treat them the same. We sell them the same products, we use the same production methods, we have the same corporate policies. We even use the same advertising-in a different language, of course.” - Alfred Zeien, Former Gillette CEO Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved A Localized View “We believe strongly that there isn’t a so-called global consumer, at least not when it comes to food and beverages. People have local tastes based on their unique cultures and traditions-a good candy bar in Brazil is not the same as a good candy bar in China. Therefore, decision making needs to be pushed down as low as possible in the organization, out close to the markets. Otherwise, how can you make good brand decisions? A brand is a bundle of functional and emotional characteristics. We can’t establish emotional links with consumers in Vietnam from our offices in Vevey.” Peter Brabeck-Letmathe, former CEO of Nestlé Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Global Brand Characteristics • Quality signal-allows a company to charge premium price in a highly competitive market • Global myth-marketers can use global consumer culture positioning (GCCP) to link the brand identity to any part of the world • Social responsibility-shows how a company addresses social problems Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Branding Strategies • Global product = personal stereos • Global brand = Sony Combination or tiered branding allows marketers to leverage a company’s reputation while developing a distinctive identity for a line of products – Sony Walkman • Co-branding features two or more company or product brands – NutraSweet and Coca-Cola – Intel Inside Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Brand Extension • Brand acts as an umbrella for new products – Example: The Virgin Group ▪ Virgin Active ▪ Virgin Mega-stores, Virgin Books ▪ Virgin Wine ▪ Virgin Radio ▪ Virgin Pure (water purification) ▪ Virgin Health ▪ Virgin Hotels, Virgin Casinos ▪ Virgin Vacations, Virgin Balloon Holidays, Virgin Galactic, Virgin Trains Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Product/Brand Matrix Table 10-1 Product/Brand Matrix for Global Marketing. Blank Blank Product Product Blank Blank Local Global Brand Local 1. Local product/local brand 2. Global product/local brand Brand Global 3. Local product/global brand 4. Global product/global brand Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved World’s Most Valuable Brands, 2017 Table 10-2 The World’s Most Valuable Brands Rank Value ($millions) Apple 184,154 Google 141,703 Microsoft 79,999 Coca-Cola 69,733 Amazon 64,796 Samsung 56,249 Toyota 50,291 Facebook 48,188 Mercedes 47,829 IBM 46,829 Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Global Brand Development (1 of 4) • Questions to ask when management seeks to build a global brand: – Does this move fit the company and/or its markets? – Will anticipated scale economies materialize? – How difficult will it be to develop a global brand team? – Can a single brand be imposed on all markets successfully? Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Global Brand Development (2 of 4) • Global Brand Leadership – Using organizational structures, processes, and cultures to allocate brand-building resources globally, to create global synergies, and to develop a global brand strategy that coordinates and leverages country brand strategies Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved Global Brand Development (3 of 4) 1. Create a compelling value proposition,
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